SECOND AMENDMENT
SECOND AMENDMENT, dated as of December 29, 1998 (this "Amendment"), to the
Second Amended and Restated Credit Agreement, dated as of June 6, 1997, as
amended and restated through September 14, 1998 and as amended by the First
Amendment dated as of November 19, 1998 (the "Credit Agreement"), among Key
Energy Group, Inc. (now known as Key Energy Services, Inc.), a Maryland
corporation (the "Borrower"), the several Lenders from time to time parties
thereto, PNC Bank, National Association ("PNC"), as Administrative Agent,
Norwest Bank Texas, N.A., as Collateral Agent and PNC Capital Markets, Inc., as
Arranger.
The parties hereto hereby agree as follows:
Defined Terms. Unless otherwise defined herein, terms which are defined in the
Credit Agreement and used herein as defined terms are so used as so defined.
Amendments to Subsection 1.1 (Definitions). Subsection 1.1 of the Credit
Agreement is hereby amended as follows:
A. by deleting the definition of "Consolidated Interest Expense" and
substituting in lieu thereof the following:
"'Consolidated Interest Expense': for any period, total interest expense
(including that attributable to Capital Lease Obligations), both expensed and
capitalized, of the borrower and its Subsidiaries for such period with respect
to all outstanding Indebtedness of the Borrower and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing and net
costs under Interest Rate Protection Agreements to the extent such net costs are
allocable to such period in accordance with GAAP, and excluding fees owed with
respect to the Existing Credit Agreement, this Agreement, the Put Facility, the
Senior Subordinated Notes, the Convertible Subordinated Debentures, the 1997
Convertible Subordinated Notes or the refinancing of the 1997 Convertible
Subordinated Notes and the imputed interest attributable to Senior Subordinated
Notes that are original issue discount notes) determined on a consolidated basis
in accordance with GAAP, net of interest income of the Borrowers and its
Subsidiaries for such period (determined on a consolidated basis in accordance
with GAAP).";
B. by deleting clause (a) of the definition of "Consolidated Leverage Ratio" and
substituting in lieu thereof the following new clause (a):
"(a) Consolidated Total Debt on such date, less the sum of (i) the amount of
cash and Cash Equivalents in excess of $5,000,000 held by the Borrower and its
Subsidiaries on such date and (ii) the aggregate principal amount of Convertible
Subordinated Debentures and 1997 Convertible Subordinated Notes outstanding on
such date to";
C. by deleting the definition of "Minimum Equity Event" and substituting in lieu
thereof the following:
"'Minimum Equity Event': an aggregate increase of at least $75,000,000 in the
Consolidated Net Worth of the Borrower and its Subsidiaries occasioned by (i)
the receipt by the Borrower of Net Cash Proceeds from the issuance of Capital
Stock of the Borrower after the Closing Date, (ii) one or more issuances by the
Borrower of its Capital Stock in connection with the acquisition of one or more
Persons or the assets of one or more Persons, (iii) the sale of Odessa or its
assets, (iv) the exchange or other refinancing of the 1997 Convertible
Subordinated Notes or (v) any combination thereof; provided, in the case of each
of the foregoing clauses (i) through (v), that no Default or Event of Default
shall have occurred and be continuing; and provided, further, that in the event
a Minimum Equity Event would otherwise occur as the result of any of the events
referred to in the foregoing clauses (ii) through (v), a Minimum Equity Event
shall not be deemed to occur unless and until the ratio of (x) Consolidated
Total Debt to (y) the sum of Consolidated Total Debt plus Consolidated Net Worth
of the Borrower and its Subsidiaries is equal to or less than 75%.";
D. by deleting the definition of "Permitted Acquisitions" and substituting in
lieu thereof the following:
"'Permitted Acquisitions': the acquisition by the Borrower and its Subsidiaries
of (a) rigs and other well service equipment, (b) well service companies and (c)
oil and gas properties and related equipment, provided that (i) after giving
effect to such acquisitions and any borrowings hereunder in connection
therewith, (x) the Consolidated Leverage Ratio shall not be more than 2.75 to
1.00 and (y) the sum of (1) the Borrower's cash and Cash Equivalents on hand and
(2) the aggregate Available Revolving Commitments shall be at least $20,000,000,
or (ii) after giving effect to such acquisition the Consolidated Leverage Ratio
is not increased and such acquisition is funded solely with the Borrower's
Capital Stock.";
E. by deleting from the definitions of "Applicable Margin" and "Commitment Fee
Rate" each reference to the "Consolidated Leverage Ratio" and substituting in
lieu thereof a reference to the "Pricing Ratio"; and
F. by adding in the appropriate alphabetical order the following new definition:
"'Pricing Ratio': on the date of any determination thereof, the ratio of (a)
Consolidated Total Debt on such date, less the amount of cash and Cash
Equivalents in excess of $5,000,000 held by the Borrower and its Subsidiaries on
such date to (b) Consolidated EBITDA of the Borrower and its Subsidiaries for
the four full fiscal quarters ending on such date; provided that for purposes of
calculating Consolidated EBITDA of the Borrower and its Subsidiaries for any
period of four full fiscal quarters, the Consolidated EBITDA of any Person
acquired by the Borrower or its Subsidiaries which upon such acquisition becomes
a Consolidated Subsidiary or is merged into the Borrower or a Subsidiary
(including, without limitation, Dawson and its Subsidiaries) during such period
shall be included on a pro forma basis for such period of four full fiscal
quarters (assuming the consummation of each such acquisition and the incurrence
or assumption of any Indebtedness in connection therewith occurred on the first
day of such period of four full fiscal quarters and assuming only such cost
reductions as are related to such acquisition and are realizable on or before
the date of calculation) if the consolidated balance sheet of such acquired
Person and its consolidated Subsidiaries as at the end of the period preceding
the acquisition of such Person and the related consolidated statements of income
and stockholders' equity and of cash flows for such period (i) have been
previously provided to the Administrative Agent and the Lenders and (ii) either
(A) have been reported on without a qualification arising out of the scope of
the audit (other than a "going concern" or like qualification or exception) by
independent certified public accountants of nationally recognized standing or
(B) have been found acceptable by the Administrative Agent."
Amendment to Subsection 7.1 (Financial Condition Covenants). Subsection 7.1 is
hereby amended as follows:
G. by deleting Subsection 7.1(a) and substituting in lieu thereof the following:
7.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of
any date set forth below to exceed the ratio set forth below opposite such date:
- ------------------------------------- ------------------------------
Consolidated
Date Leverage Ratio
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
December 31, 1998 5.90 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
March 31, 1999 5.90 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
June 30, 1999 5.90 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
September 30, 1999 5.90 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
December 31, 1999 5.75 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
March 31, 2000 5.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
June 30,2000 4.50 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
September 30, 2000 4.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
December 31, 2000 3.75 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
March 31, 2001 3.50 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
June 30, 2001 3.25 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
September 30, 2001 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
December 31, 2001 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
March 31, 2002 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
June 30, 2002 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
September 30, 2002 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
December 31, 2002 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
March 31, 2003 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
June 30, 2003 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
September 30, 2003 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
December 31, 2003 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
March 31, 2004 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
June 30, 2004 3.00 to 1.00
- ------------------------------------- ------------------------------
- ------------------------------------- ------------------------------
September 30, 2004 3.00 to 1.00;
- ------------------------------------- ------------------------------
H. by deleting Subsection 7.1(b) and substituting in lieu thereof the following:
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio for any period of four consecutive fiscal quarters of the
Borrower ending as of any date set forth below to be less than the ratio set
forth below opposite such date:
- -------------------------------- ------------------------------------
Consolidated
Date Interest
Coverage Ratio
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
December 31, 1998 1.50 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
March 31, 1999 1.50 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
June 30, 1999 1.50 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
September 30, 1999 1.40 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
December 31, 1999 1.50 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
March 31, 2000 1.75 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
June 30, 2000 1.75 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
September 30, 2000 2.00 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
December 31, 2000 2.25 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
March 31, 2001 2.50 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
June 30, 2001 2.50 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
September 30, 2001 2.75 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
December 31, 2001 3.00 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
March 31, 2002 3.25 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
June 30, 2002 3.50 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
September 30, 2002 3.75 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
December 31, 2002 4.00 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
March 31, 2003 4.00 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
June 30, 2003 4.00 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
September 30, 2003 4.00 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
December 31, 2003 4.00 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
March 31, 2004 4.00 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
June 30, 2004 4.00 to 1.00
- -------------------------------- ------------------------------------
- -------------------------------- ------------------------------------
September 30, 2004 4.00 to 1.00
- -------------------------------- ------------------------------------
; provided, that for the purposes of determing the ratio described above for the
fiscal quarters of the Borrower ending December 31, 1998, March 31, 1999 and
June 30, 1999, Consolidated Interest Expense for the relevant period shall be
deemed to equal Consolidated Interest Expense for such fiscal quarter (and, in
the case of the latter two such determinations each previous fiscal quarter
commencing after September 30, 1998) multiplied by 4, 2 and 4/3, respectively.;
I. by deleting Subsection 7.1(c) and substituting in lieu thereof the following:
(c) Consolidated Senior Leverage Ratio. (i) Permit the Consolidated Senior
Leverage Ratio as of any date set forth below to exceed the ratio set forth
below opposite such date:
- ---------------------------------------- ----------------------------------
Consolidated
Senior
Date Leverage Ratio
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 1998 4.50 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 1999 4.50 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 1999 4.50 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 1999 4.50 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 1999 4.25 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 2000 3.75 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 2000 3.25 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 2000 2.75 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 2000 2.50 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 2001 2.25 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 2001 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 2001 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 2001 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 2002 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 2002 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 2002 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 2002 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 2003 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 2003 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 2003 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 2003 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 2004 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 2004 2.00 to 1.00
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 2004 2.00 to 1.00";
- ---------------------------------------- ----------------------------------
J. by deleting Subsection 7.1(d) and substituting in lieu thereof the following:
(d) Consolidated Net Worth. Permit the Consolidated Net Worth of the Borrower
and its Subsidiaries to be less than the sum of (i) the difference between (x)
$135,000,000 minus (y) the amount (in the aggregate for the following clauses
(A), (B) and (C), taken together, not to exceed $15,000,000) of (A)
non-recurring transaction expenses incurred in connection with the consummation
of the Acquisition, (B) related financing and restructuring charges and (C)
writeoff of goodwill and licensing agreements, plus (ii) 75% of Consolidated Net
Income of the Borrower and its Subsidiaries (to the extent a positive number)
for each fiscal quarter completed after the Closing Date commencing with the
fiscal quarter ending December 31, 1998, plus (iii) 75% of the Net Cash Proceeds
of any offerings or issuances of Capital Stock of the Borrower or any of its
Subsidiaries after the Closing Date, plus (iv) 75% of the increase in the
Consolidated Net Worth of the Borrower and its Subsidiaries resulting from any
conversion of the 1997 Convertible Subordinated Notes or any future convertible
indebtedness of the Borrower and its Subsidiaries.; and
K. by adding a new Subsection 7.1(e) as follows:
(e) Consolidated EBITDA. Permit the Consolidated EBITDA of the Borrower and its
Subsidiaries for any period of four consecutive fiscal quarters of the Borrower
ending on any date set forth below to be less than the amount set forth below
opposite such date:
- ---------------------------------------- ----------------------------------
Consolidated
Date EBITDA
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 1998 $140,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 1999 115,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 1999 100,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 1999 95,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 1999 100,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 2000 115,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 2000 125,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 2000 135,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 2000 140,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 2001 145,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 2001 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 2001 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 2001 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 2002 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 2002 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 2002 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 2002 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 2003 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 2003 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 2003 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
December 31, 2003 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
March 31, 2004 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
June 30, 2004 150,000,000
- ---------------------------------------- ----------------------------------
- ---------------------------------------- ----------------------------------
September 30, 2004 150,000,000
- ---------------------------------------- ----------------------------------
; provided that for purposes of calculating Consolidated EBITDA of the Borrower
and its Subsidiaries for any such period of four consecutive fiscal quarters,
the Consolidated EBITDA of any Person acquired by the Borrower or its
Subsidiaries which upon such acquisition becomes a Consolidated Subsidiary or is
merged into the Borrower or a Subsidiary (including, without limitation, Dawson
and its Subsidiaries) during such period shall be included on a pro forma basis
for such period of four full fiscal quarters (assuming the consummation of each
such acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period of four full
fiscal quarters and assuming only such cost reductions as are related to such
acquisition and are realizable on or before the date of calculation) if the
consolidated balance sheet of such acquired Person and its consolidated
Subsidiaries as at the end of the period preceding the acquisition of such
Person and the related consolidated statements of income and stockholders'
equity and of cash flows for such period (i) have been previously provided to
the Administrative Agent and the Lenders and (ii) either (A) have been reported
on without a qualification arising out of the scope of the audit (other than a
"going concern" or like qualification or exception) by independent certified
public accountants of nationally recognized standing or (B) have been found
acceptable by the Administrative Agent.
Amendment to Subsection 7.2 (Limitation on Indebtedness). Subsection 7.2 is
hereby amended by deleting clause (b)(ii) and substituting in lieu thereof the
following:
(ii) Senior Subordinated Notes (x) in an aggregate principal amount not to
exceed $300,000,000 (plus, in the case of Senior Subordinated Notes that are
original issue discount notes, an amount equal to the amount of such discount,
provided that the imputed interest represented thereby shall be in compliance
with clause (iii) of the definition of the term "Senior Subordinated Notes" and
with the following clause (y)) and (y) in the event that the aggregate principal
amount of Senior Subordinated Notes exceeds $150,000,000, bearing interest at a
rate per annum not in excess of 13%; provided that (A) the proceeds thereof are
used to prepay the Put Facility or prepay Term Loans as provided in Section 2.10
(and Guarantee Obligations of the Borrower's Subsidiaries in connection with the
foregoing as contemplated hereby) and (B) in the event that the aggregate
principal amount of Senior Subordinated Notes equals or exceeds $125,000,000,
the Interim Loan Agreement is amended (in form and substance satisfactory to the
Administrative Agent) so that the covenants, events of default and remedies
therein conform, in all material respects, to those in the Senior Subordinated
Notes, and.
Amendment to Subsection 7.3 (Limitation on Liens). Subsection 7.3 is hereby
amended by deleting subsection (g) and substituting in lieu thereof the
following:
(g) Liens created pursuant to the Security Documents (including Liens securing
the Put Facility until the Merger Date and Liens securing the Dawson 9-3/8%
Notes on and after the Merger Date) and Liens on Cash Equivalents which are
acquired in connection with the defeasance permitted by Section 7.10 of
$1,406,000 of the Dawson 9-3/8% Notes;.
Amendment to Subsection 7.8 (Limitation on Capital Expenditures). Subsection 7.8
is hereby amended by deleting in its entirety the table set forth therein and
substituting in lieu thereof the following table:
Fiscal Year Amount
1999 $30,000,000
2000 $30,000,000
2001 $35,000,000
2002 $45,000,000
2003 $55,000,000
2004 $65,000,000".
Amendment to Annexes I and II to Credit Agreement (Pricing Grids A and B). Each
of Annex I and Annex II to the Credit Agreement is hereby amended by deleting
therefrom each reference to the "Consolidated Leverage Ratio" and substituting
in lieu of each such reference a reference to the "Pricing Ratio".
Conditions to Effectiveness of this Amendment. This Amendment shall become
effective as of the date (the "Effective Date") that (a) the Administrative
Agent shall have received (i) this Amendment, executed and delivered by a duly
authorized officer of the Borrower and the Lenders, (ii) the attached
Acknowledgment and Consent, executed and delivered by a duly authorized officer
of each of the signatories thereto, (iii) such other corporate documents and
resolutions as the Administrative Agent may request and (iv) payment of all fees
required to be paid by the Borrower, as agreed upon by the Borrower and the
Administrative Agent, and (b) an amendment to the Interim Loan Agreement
(providing for modifications that conform, as applicable, to the modifications
of the Credit Agreement set forth in this Amendment), in form and substance
satisfactory to the Administrative Agent, shall have become effective in
accordance with the terms thereof.
Miscellaneous.
L. Representations and Warranties. The Borrower represents and warrants to the
Administrative Agent and the Lenders that as of the Effective Date, after giving
effect to this Amendment, no Default or Event of Default has occurred and is
continuing, and the representations and warranties made by the Borrower in or
pursuant to the Credit Agreement or any Loan Documents are true and correct in
all material respects on and as of the Effective Date as if made on such date
(except to the extent that any such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
were true and correct in all material respects on and as of such earlier date).
M. Continuing Effect of the Credit Agreement. This Amendment shall not
constitute an amendment or waiver of or consent to any provision of the Credit
Agreement not expressly referred to herein and shall not be construed as an
amendment, waiver or consent to any action on the part of the borrower that
would require an amendment, waiver or consent to any action on the part of the
Borrower that would require an amendment, waiver or consent of the Agents or the
Lenders except as expressly stated herein. Except as expressly consented to
hereby, the provisions of the Credit Agreement are and shall remain in full
force and effect.
N. Fees and Expenses. The Borrower agrees to pay or reimburse the Administrative
Agent on demand for all its reasonable out-of-pocket costs and expenses incurred
in connection with the preparation and execution of this Amendment, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.
O. Counterparts. This Amendment may be executed in any number of counterparts
(including by telecopy) by the parties hereto, each of which counterparts when
so executed shall be an original, but all counterparts taken together shall
constitute one and the same instrument.
P. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
KEY ENERGY SERVICES, INC. (formerly known as Key
Energy Group, Inc.)
By: /s/ Stephen E. McGregor
Title: Executive Vice President and Chief
Financial Officer
PNC BANK, NATIONAL ASSOCIATION, as Administrative
Agent and as a Lender
By: /s/ Thomas A. Majeski
Title: Vice President
NORWEST BANK TEXAS, N.A.
By: /s/ Dale S. Gravelle
Title: Vice President
BANK POLSKA KASA OPIEKI S.A., PEKAO S.A. GROUP, NEW
YORK BRANCH
By: /s/ Hussein E. El-Tawil
Title: Vice President
BANK LEUMI, USA
By: /s/ Gloria Bucher
Title: First Vice President
BOEING CAPITAL CORPORATION
By: /s/ James C. Hammersmith
Title: Senior Documentation Officer
THE CIT GROUP/EQUIPMENT FINANCING, INC.
By: /s/ Eric M. Moore
Title: Assistant Vice President
KZH HIGHLAND-2 LLC
By: /s/ Virginia Conway
Title: Authorized Agent
KZH PAMCO LLC
By: /s/ Virginia Conway
Title: Authorized Agent
PAMCO CAYMAN LTD.
By: Highland Capital Management, L.P., as
Collateral Manager
By: /s/ James Dandero
Title: President
ML CLO XX PILGRIM AMERICA (CAYMAN) LTD.
By: Pilgrim Investments, Inc. as its
Investment Manager
By: /s/ Jason T. Groom
Title: Assistant Vice President
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc., as its
Investment Manager
By: /s/ Jason T. Groom
Title: Assistant Vice President
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Asset Management, L.P., as
Investment Advisor
By: /s/ Gilles Marchand
Title: Authorized Signatory
MERRILL SENIOR FLOATING RATE FUND, INC.
By: /s/ Gilles Marchand
Title: Authorized Signatory
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned corporations, as a guarantor under that certain Amended
and Restated Master Guarantee and Collateral Agreement, dated as of June 6,
1997, as amended and restated through September 14, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Guarantee"), made by
each of such corporations in favor of the Collateral Agent, ackowledges the
foregoing amendment and confirms and agrees that the Guarantee is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects and the guarantee and all of the Collateral (as defined in the
Guarantee) do, and shall continue to, secure the payment of all of the
Obligations (as defined in the Guarantee) pursuant to the terms of the
Guarantee. Capitalized terms not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement referred to in the Amendment
to which this Acknowledgment and Consent is attached.
YALE E. KEY, INC.
KEY ENERGY DRILLING, INC.
WELLTECH EASTERN, INC.
ODESSA EXPLORATION INCORPORATED
KALKASKA OILFIELD SERVICES, INC.
WELL-CO OIL SERVICE, INC.
PATRICK WELL SERVICE, INC.
MOSLEY WELL SERVICE, INC.
RAM OIL WELL SERVICE, INC.
ROWLAND TRUCKING CO., INC.
LANDMARK FISHING & RENTAL, INC.
DUNBAR WELL SERVICE, INC.
FRONTIER WELL SERVICE, INC.
KEY ROCKY MOUNTAIN, INC.
KEY FOUR CORNERS, INC.
JETER SERVICE CO.
JETER WELL SERVICE, INC.
JETER TRANSPORTATION, INC.
INDUSTRIAL OILFIELD SUPPLY, INC.
BROOKS WELL SERVICING, INC.
UPDIKE BROTHERS, INC.
J.W. GIBSON WELL SERVICE COMPANY
KEY ENERGY SERVICES-SOUTH TEXAS, INC.
WATSON OILFIELD SERVICE & SUPPLY, INC.
WELLTECH MID-CONTINENT, INC.
DAWSON PRODUCTION MANAGEMENT, INC.
DAWSON PRODUCTION ACQUISITION CORP.
DAWSON PRODUCTION TAYLOR, INC.
KEY ENERGY SERVICES-CALIFORNIA, INC.
By: /s/ Stephen E. McGregor
Name: Stephen E. McGregor
Title: Vice President of each of the foregoing
companies
DAWSON PRODUCTION PARTNERS, L.P.
By: DAWSON PRODUCTION MANAGEMENT, INC., Its
sole general partner,
By: /s/ Stephen E. McGregor
Name: Stephen E. McGregor
Title: Vice President